Turn and Face the Strange Ch-ch-ch-Changes

Meta's ad platform has been volatile since mid-February. How much is social media "noise" and how much is real?

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TRIVIA • Does Google’s “Ad Strength” Even Matter?

There are lots of metrics used for digital advertising — and each platform has its own metrics too. Take Google’s “ad strength” number. That’s a measure of how well Google thinks your ad is set up, mostly in terms of your creative.

That’s different, by the way, from Quality Score, which tries to give you an idea of how well your ad performs compared to other advertisers.

But one question that keeps coming up for marketers is:

Does your Google ad campaign’s Ad Strength affect your placement in the ad auction at all?

The answer is at the end of today’s issue.

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YOUTUBE • Shopping Collections and Other Updates

YouTube is launching Shopping Collections, a new way for creators to curate products from their favorite brands.

YouTube’s example:

For instance, they could pick a selection of products for any theme from your current everyday makeup look to the ultimate capsule wardrobe.

YouTube

Collections will appear in a creator’s product list, Store tab, and video description. These Collections can be put together on the Studio mobile app, though the company says it will be coming to Desktop soon.

They’re also launching a new Affiliate Hub in the YouTube app so creators can find the latest list of Shopping partners, competitive commission rates, promo codes, and even request samples from brands.

Third, YouTube is expanding its bulk tagging for affiliate shopping creators. That expansion sees the feature going to all shopping creators.

Finally, they’ve added Fourthwall to their list of platforms that support content management.

Today’s Trivia — Guess and Win!

Each month, we pick someone who guesses in a trivia question and comp them the Premium Newsletter! Just click on any option below:

What year did Shopify go public on the New York Stock Exchange?

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META • Ad Volatility? You’re Not the Only One.

If you’ve been feeling like your ads on Meta’s platform have been really volatile lately, you’re not alone.

Anecdotal reports are all over social media, with media buyers saying the last month has seen particularly strong swings.

But what does the broad data tell us?

I asked Yarden Shaked, CEO of Varos. They anonymize and aggregate data from 6,000 e-commerce advertisers, so they’ve always got a great birds-eye view of the overall market.

TOD: Yarden, this volatility to me felt like it started like mid-February. What are you seeing?

Starting on February 20th, there was a lot of volatility that we were starting to see, starting at CPMs and flowing through to ROAS.

But 40% of companies were what we call significantly affected, which means a data deterioration on a ROAS basis of 10% or more.

And 13% of companies were very significantly affected, which is a deterioration of over 25% or more.

 
TOD: Can we infer any patterns? Like is this just for certain brands or company sizes? Or is Meta moving the spend around?

It's a lot about spend shifting to weird places. Like, all the spend shifts to Reels, or all of a sudden, all the spend is on iOS versus Android, and things like that.

And it feels like there's something in the mechanism that got a little out of whack.

And that's what's going on, and nothing to do with a specific company or thing.

There was Theory going around, there was Shopify, we disproved that. iOS, we also disproved that.

TOD: Is this volatility dramatic enough for us to pause Meta ads?

I mean, Meta is still king. Even at that 10% deterioration, it's still worth it to spend most of your budget on Meta. It's the only place that people are actually able to build a significant top of funnel and scale.

We haven't seen spend deteriorate, even though some of the performance has deteriorated.

So, on a macro thing, it's definitely something to observe.

If you want to compare your ad data with others in your industry, you can sign up for a free Varos account at https://www.varos.com Their free account will let you benchmark against specific categories, give you real-time market trend data, and a four-week data lookback.

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INSTAGRAM • Ad Revenue is Skyrocketing

In a rare peek behind the curtain, Meta has broken out Instagram’s ad revenue. And it shows a hefty profit over the past few years.

Normally, Meta groups its financial updates, making it tricky to gauge each app's individual success. But this year, as part of it latest legal filing to dismiss an antitrust case, they provided specifics.

According to the documents, Instagram made:

  • $11.3 billion in 2018

  • $17.9 billion in 2019

  • $22 billion in 2020

  • $32.4 billion in 2021

The most recent numbers in the documentation catch up to the first half of 2022, which when you extrapolate is likely past $33 billion.

Remember, Zuckerberg bought Instagram for a measly one billion dollars.

The data suggests that Instagram generated around 30% of Meta’s total revenue in 2022. Which, if you were to extrapolate that into last year’s numbers, would suggest that IG brought in around $40 billion in ad revenue in 2023.

There are other legal things happening, not to mention new European Union regulations that require platforms to disclose more. So this might not be the only revenue update we get.

THREADS • API Adds Replies, Insights, and More

Threads may soon show up on more marketers’ content calendars now that their API is starting to get into gear.

It’s in testing with a handful of third-party platforms for now, but so far it’s only a publishing API. They only recently added the ability to see, reply to, or hide incoming comments, as well as pull some basic post data like engagement numbers.

Now, we’re getting more information on what’s likely to be in the toolkit, with the release of the official API documentation.

Webhooks will soon let third-party tools get an immediate notification when someone replies to a post. This engagement part is really one of the key missing pieces that’s holding a lot of big brands back from posting on Meta’s competitor to X.

Also, a few other details emerged:

  • Accounts will only be allowed to publish 250 published posts from a third-party tool within a 24-hour period

  • You’ll be limited to 1000 replies within a 24-hour period

  • Only JPEG and PNG image types are supported for image formats

  • Video uploads will be limited to 5 minutes

  • And text posts won’t be able to exceed 500 characters

So far, there still aren’t ads on the platform. Though you can bet that’s high up on the list.

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TIKTOK • Readying a Competitor to Instagram

So Threads wants to be the next Twitter, and TikTok wants to be the next Instagram.

TikTok seems to be very close to releasing a new photo-sharing app which will be called TikTok Notes (which is a very strange name for an app that does images, not — you know — notes).

Some users are already being prompted to automatically share their photo posts on the forthcoming app.

This is, of course, super smart, since it means the app will launch with a whole bunch of content. A surprising amount of TikTok content is indeed already just images in a carousel.

TikTok wouldn’t confirm a launch date.

TRIVIA • The Answer ⬇️

As for the trivia question:

Does your Google ad campaign’s Ad Strength affect your placement in the ad auction at all?

This has been the subject of some speculation on social media in the past week or so, but Ginny Marvin, Google's Ads Liaison, this week weighed in with the answer: No, Ad Strength is not used in the auction.

So even if you’re not doing Google’s content recommendations, and even if your ad strength is really low, it will not change whether your ads will serve.

What’s the difference between Ad Strength and Quality Score?

While the categories that Ad Strength measures do influence your ad’s serving eligibility, the Ad Strength rating itself is not a factor in the auction during serving.

Ultimately, the quality of your ads and assets are what influence your serving eligibility.

Ad Strength is a way for Google Ads to provide feedback on how well your ad is set up.

Similarly, Quality Score is a diagnostic tool that aims to give you an idea of how well your ad quality is compared to the quality of ads from other advertisers. Quality Score is not an input in the ad auction. It’s a diagnostic tool to identify how ads shown for certain keywords affect the user experience.

Google documentation

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